Report: IBM Leads Application Hosting Services Market

LAS VEGAS, NV -- (MARKET WIRE) -- 01-03-2004 -- IBM PartnerWorld -- IBM leads the Application Hosting Services market according to a recent report published by Yankee Group, a leading technology research and consulting firm.

The report, titled "Application Hosting Services Create Demand for IBM and Partners," says that even during a weak investment climate, Application Hosting "services have developed sales and new customers for both IGS and its partners."

"More than 80 percent of IBM's new SMB customers entered IBM as a hosted applications customer," said Andy Efstathiou in the report. "Demand has increased because this model significantly reduces customers' operational risk and capital investment."

"IBM is very pleased to be recognized by Yankee Group for our leadership in Application Hosting services," said Jim Corgel, general manager, IBM e-business Hosting Services. "The latest figures from Yankee Group clearly indicate that IBM's e-business hosting services are winning in the marketplace and we continue to grow our offerings to meet the demands of customers, provide them with a competitive advantage and transform them into on demand businesses."

According to the report, IBM offers "software as a service through its hosting capabilities" using four business models:

--  Traditional hosting: IBM sells hosting services and the ISV sells the
    software license.
--  Joint sale: IBM and the customer enter into an agreement which
    includes IBM's terms for the infrastructure and consulting services, and
    the ISV's terms for software usage.  The customer receives only one invoice
    for the combined services.
--  Wholesale: The ISV and the customer enter into an agreement for the
    service with "IBM on the inside" visibility to the customer.
--  Business transformation: IBM and the customer enter into an agreement
    including multiple services with "ISV on the inside" visibility to the
"IBM developed a business with leading market share built on realistic aspirations, aggressive partnering and targeted investment," cites the report. "Few others have succeeded in developing a focused approach to this market."

IBM Application Hosting Services gives businesses an alternative to building and running their technology infrastructure in-house by tapping into computer systems in IBM data centers worldwide to provide sophisticated management of software applications.

IBM currently hosts applications for 36 ISVs, including Siebel, SAP, Ariba, Onyx, Zantaz, Emptoris and DemandTec, and will be announcing new applications shortly.

IBM has been providing hosting services since 1995 and has over 100,000 servers under management in 234 data centers around the world. For more information, visit:

About IBM Global Services

IBM Global Services is the world's largest information technology services and consulting provider, generating record revenue and signings in 2003 of $42.6 billion and $55.5 billion, respectively. Some 180,000 professionals in more than 160 countries help clients integrate information technology with business value -- from the business transformation and industry expertise of IBM Business Consulting Services to hosting, infrastructure, technology design and training services. Leveraging IBM's unequalled scope and scale, IBM Global Services delivers integrated, flexible and resilient processes -- across companies and through business partners -- that enable clients to benefit from the on demand business model by saving money and transforming their businesses to be more competitive. For more information, visit

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